QUESTION: 165

Which of the following statements concerning ownership of property under a tenancy by the entirety is correct?

It is a form of property ownership that applies only to personal property.
The property will be in the probate estate of the first joint tenant to die.
One tenant can freely transfer his or her property interest to a third person.
It is a form of property ownership available only to married persons.

Answer(s): D

Among the assets in a decedent's gross estate is stock in a closely held corporation that was left to a nephew. The interest passing to the nephew is required to bear the burden of all estate taxes and expenses. The relevant facts concerning this estate are:
* Adjusted gross estate $1,600,000
* Fair market value of stock in the
* closely held corporation 700,000
* Funeral expenses 30,000
* Executor's commission 50,000
* Federal and state death tax 160,000

What amount of closely held corporate stock can be redeemed under IRC Section 303 so that the redemption will be treated as a sale or exchange rather than a dividend distribution?

0
$ 80,000
$700,000
$240,000

Answer(s): D

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QUESTION: 167

A man died in February of this year. Last year, when he learned that he had a terminal illness, he immediately made the following gifts and filed the required gift tax return:
Fair Market Value
Gift of listed stock to a
* qualified charity $100,000
* Gift of listed bonds to his wife 200,000
* Gift of a boat to his son 10,000
* Gift of a sports car to his daughter 10,000

What amount must be brought back to the man's estate as an adjusted taxable gift in the calculation of his federal estate taxes?

$320,000
0
$280,000
$ 90,000

Answer(s): B

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QUESTION: 168

Which of the following statements concerning the inclusion and valuation of all or part of a commercial annuity in the estate of an annuitant is (are) correct?
1. A life annuity with a period certain is includible to the extent of the present value of any remaining guaranteed payments.
2. If the executor elects the alternate valuation date, an annuity is includible at its replacement cost 6 months after death.

2 only
Both 1 and 2
Neither 1 nor 2
1 only

Answer(s): D

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